Profit struggles cloud Om Shanti Om, Saawariya

It is a battle that erupts every festive season, and this year is no different.

The multiplex owners and distributors of Saawariyaand Om Shanti Om are at loggerheads over sharing the profits from ticket sales. And that has put a question mark over whether the films will release on November 9, the Diwali weekend.

Daily, no-quarters-given negotiations are on even as you read this.

"We are still negotiating with the distributors," admits Vishal Anand, vice president, marketing, FunRepublic cinemas. "We are all having everyday meetings. It is but natural that everyone expects more share of profits when such big films release."

According to our sources, the key point is that both Om Shanti Om and Saawariya are big-budget films that have been sold heavily to distributors who want to rake in the profit this festive season.

It was reported that Om Shanti Om was sold for Rs 75 crores (Rs 750 million) to Eros and director Farah Khan had said Shah Rukh Khan had already made profit of Rs 50 crores (Rs 500 million) before the release of the film.

Saawariya is the first Hindi film that a Hollywood studio, Sony Picture Entertainment, has produced.

The distributors of the films are demanding 50 per cent share from multiplex owners from ticket sales in the first two weeks. The multiplex owners don't want to give up their profits for the second week.

Generally, the trend is that in the second week the ratio of the profit falls -- to 38 to 42 percent -- depending on how the film fares in the first week.

What has surprised industry observers is that this problem has not arisen from the Yash Raj camp, which never budges when it comes to sharing profits. Last year, they did not release Dhoom: 2 in certain parts of north India as multiplex owners were not willing to share more profits with them.

"These kind of negotiations are the natural course of business," says Vikramjit Roy, Sony Picture Entertainment spokesperson. "If you want to advertise a product on rediff.com,obviously the client will negotiate with your sales team, isn't it? In the same way we are talking to them."

He emphasises that Saawariya is releasing on November 9 for sure.

Hoardings and promos of both the films were withdrawn from some multiplexes, a major surprise for audiences and industry insiders alike, given that the release date was just two weeks away.

"You have to say no somewhere. The distributors cannot armtwist all the time," said a multiplex owner who did not want to be named.